1. INTERNATIONAL BUSINESS
International business consists of all commercial
transactions between two or more countries.
Today global events and competition affect almost all
companies large and small because most sell output to
and secure supplies from foreign countries.
Many companies also compete against products and
services that come from abroad
Thus most managers, regardless of industry or
company size, need to approach their operating
strategies from an international standpoint.
2. It refers to the integration of world economies through
the reduction of barriers to the movement of trade,
capital, technology and people
3. Forces driving globalisation
Increase in and expansion of technology
Liberalisation of cross border trade and resource
movement.
Development of services that support international
business
Growing consumer pressures
Increased global competition
Changing political situations
Expanded cross national cooperation.
4. Arguments against globalization
Threats to national sovereignty
Economic growth and environmental stress
Growing income inequality
5. Threats to national sovereignty
Harm to the local objectives and policies
Local overdependence
Threat to cultural homogeneity
6. Economic growth and environmental
stress
As globalization brings in growth, it consumes more
non renewable resources and increases environ mental
damage.
Water pollution through toxic and pesticide runoffs
into rivers and oceans
Air pollution from factory and vehicle emissions
Deforestation
8. Why international business
To create value for their organisation
Expanding sales
Acquiring resources
Minimising risk
9. Modes of operation in
international business
Merchandise exports and imports
Service exports and imports
Investments
10. Merchandise exports and imports
Merchandise exports are tangible products that are
sent out of a country
Merchandise imports are goods bought in a country
Because we can actually see these goods as they leave
and enter the country, we sometimes call them visible
exports and imports.
11. Service exports and imports
When we refer to non product international earnings
we use the term service exports and imports.
The company or individual that provides the service
and receives payments makes a service export.
The company or individual that receives the service
and pays for it makes a service import.
It can be of three forms :- Tourism and transportation,
Service performance , Asset use.
12. Investments
Foreign investment means ownership of foreign
property in exchange for a financial return such as
interest and dividends.
It can be of two forms :- Direct investment & Portfolio
investments.
13. How international business differs
from domestic business
Physical and social factors
• Geographic influences
• Political policies
• Legal policies
• Behavioral factors
• Economic forces
14. The competitive environment
• Competitive strategy for products
• Company resource and experience
• Competitors faced in each market
